Malaysian ‘Switching Economy’ worth over US$53 billion in revenue: Accenture
By Digital News Asia May 6, 2014
- 79% consumers switched service providers due to poor customer service experiences
- 72% who switched say companies could have done something to prevent them
MOST companies in Malaysia are failing at keeping their customers from switching service providers despite 98% of Malaysian consumers using at least one digital channel to search for information via highly influential corporate sites.
As a result, there is a potential US$53 billion of revenue at play in the market represented by the ‘switching economy’, according to new research released by Accenture.
The term ‘switching economy’ refers to the revenue potential at play, driven by consumer switching. It calculates the potential expenditure shift resulting from customers that switched from one provider to another (‘complete switch’) as well as those that will potentially do so as they started to take portions of their spending to new providers (‘partial switch’).
The research, which can be found in the consultancy firm’s annual Global Consumer Pulse Survey, revealed that in the past year, almost 80% of Malaysian consumers switched service providers due to poor customer service experiences.
“Low levels of customer satisfaction and changing customer behaviours in the digital marketplace are driving the switching economy that presents opportunities as well as threats.
“When done right, the customer experience can become a source of competitive differentiation that pulls companies away from competition,” said Joon Seong Lee, managing director, Sales & Customer Services, Accenture Asean.
The survey also revealed the following findings:
- 79% of Malaysian customers have switched due to poor service in at least one industry. For Malaysian customers, when switching due to poor service, both ‘price’ and ‘customer service’ are the main factors when selecting new providers.
Just 19% are satisfied overall with their existing service providers.
73% of switchers are driven by price when considering new providers putting Malaysia well above the Asia Pacific average of 67%.
72% of consumers who switched say companies could have done something to prevent them from switching – first contact resolution being a significantly influence on their decision to switch (52%).
Just 17% Malaysian customers find that their providers are very effective at delivering convergence between traditional and digital interactions. Malaysia scored lower than emerging market averages.
- About 94% of the consumers read about companies’ products and services on social media sites and close to 46% do it several times a week.
Digital customers demand tailored experiences
Despite a high percentage of Malaysian consumers using digital technologies, there is a gap between digital use and the ability of companies to use them to improve customer experiences.
Malaysia scored lower than emerging market averages at just 17% customers finding the service providers effective in this area.
In this respect, the retail industry is most popular for its loyalty programs in Malaysia with 54% of consumers participating in at least one programme displaying 68% persuasion efficiency. The Property and Casualty Insurance and Cable/Satellite industries witnessed the lowest participation levels.
While best deals and tailored programmes are successful at persuading consumers to stick to loyalty programmes, these are the very reasons people find them ineffective.
According to Accenture, it could mean that the competitors in the market are equally weak in offering better deals. Lee emphasised that improvement is not only digital capability; success in the age of the nonstop customer does not all come down to digital.
Knowledgeable, polite and friendly employees who can solve customer problems effectively and the assurance of personal data protection are important customer service dimensions for more than 80% customers.
Seamlessly integrating the digital and offline worlds give customers the ability to choose their experience and maximize control over how they interact with companies. That control extends to their personal information and how companies balance creative use of digital applications with privacy and data security.
The report also found that companies that delivered valued customer experiences exhibited five common high impact capabilities, known as the customer-driven digital blueprint.
These capabilities include:
Hyper-relevance: Show customers the company learns from every interaction and applies it at a more personal level, including customising their channel and interaction preferences, so customers don’t have to repeat themselves or hit unnecessary roadblocks. This means using predictive analytics to provide a more tailored customer experience with more customisation and personalization.
Relationships at Scale: Digital gives businesses rich channels through which to communicate with customers in much more personal ways and manage relationships with customers at scale. Use digital to bring the intimacy of the corner store to all customers and then give them more convenient access and more tailored services that matter to them.
Seamless Experience: Creating a seamless experience requires a multi-channel approach. Integrate information and processes that enable customers to flow easily across different channels when and how they choose.
Inherently Mobile: Learn from customers about what they want to do differently with mobile, and invest in mobile services and support capabilities that stand out to customers.
Social Media: Harness social media in order to deliver up-to-the-second customer preferences, greater levels of trust, a mechanism for direct and dynamic interaction, and more usable data upon which business decisions can be made.
The findings can be found in the ninth annual Accenture Global Consumer Pulse Survey, which measured the experiences of 12,867 customers in 32 countries and across 10 industries to gain insight into the changing dynamics of today’s ‘nonstop’ customers and assess consumer attitudes toward marketing, sales and customer service practices. The survey included more than 1,027 industry responses from Malaysia.
To download a copy of the report, click here.